Notes, summaries, assignments, exams, and problems for Economics

CHAPTER 3

16) If the world terms of trade for a country are somewhere between the domestic cost ratio of H and that of F, then

B) country H and country F will both gain from trade.

17) If the world terms of trade equal those of country F, then

A) country H but not country F will gain from trade

18) If the world terms of trade equal those of country H, then

E) country F but not country H will gain from trade

CHAPTER 4

37) In the specific factors model, a 5% increase in the price of food accompanied by a 10% increase in the price of cloth will cause ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in the welfare of the fixed factor in the production of cloth.
A) an ambiguous change;...

1) Which of the following is a tax?

I. A 1% special sales tax for funding local Road construction.

II. A fee paid to the state for a license To practice as an attorney.

III. An income tax imposed by Philadelphia On persons working within the city limits.

IV. A special property assessment for Installing a new water system in the taxpayer's neighborhood.

E) I and III are correct.

2) Marc, a single taxpayer, earns $60,000 In taxable income and $5,000 in interest from an investment in city of Birmingham Bonds. Using the U.S. Tax rate schedule for year 2018, how much federal tax will he owe? (Use tax rate schedule) C) $9,139.50

3) Marc, a single taxpayer, earns $60,000 In taxable income and $5,000 in interest from an investment in city of Birmingham...

·MONOPOLISTIC ADVANTAGE:

Suggests that FDI is preferred by MNEs because it provides the firm with control over resources and Capabilities in the foreign market, and a degree of monopoly.

Chapter 3: Municipal Sports Infrastructure Plan

This chapter outlines one of the municipality's major plans concerning sports development and infrastructure construction.

The Local Sports Infrastructure Plan

The Local Sports Infrastructure Plan (PALE) compiles the municipal census of existing sports facilities and spaces, along with the desired future state. It also includes privately owned sports facilities and those belonging to universities. The PALE is established in accordance with the guidelines of the Regional Master Plan for Sports Facilities and the General Urban Development Plan of each municipality.

Purpose

The PALE provides a physical support system for developing municipal sports. Its purpose is the effective management of sports infrastructure...

1. Sunk Costs

Costs that do not vary according to different decisions

• Eg. A student buys a book for $50 and can sell it for $20. Sunk costs amount for $30
• Eg. Market research, R&D (frequent in IT sector)

Managerial decision-making:

1. Ignore sunk costs and consider only avoidable costs to be very careful before committing to costs that will become sunk, since such commitments cannot be reversed
2. Exploit investments in sunk costs as a way to strategically influence the behavior of competitors

- Major entry barrier because they increase the cost of exit

Relationship between fixed and sunk costs: - sunk costs are the amount of fixed costs that cannot be recouped

2. Incremental Costs

Change in costs between undertaking a course of action and not undertaking...

1.5 Protection vs. Integration

Protectionism: The protection objective is to keep alive domestic production and to increase import prices. For this purpose, it uses different instruments:

• Tariffs: taxes on imported goods to protect the domestic industry. An external tariff is a 'tax' on foreign products introduced in the domestic market. The effect is that its price is higher and it is more difficult to compete with domestic products.
• Quotas on imports: is a limitation of the quantity of foreign products to be imported, regardless of the price. Quotas limit imports and increase domestic prices. The limited quantity is an obstacle for foreign products when international prices have decreased.
• Non-tariff barriers: are administrative regulations for

Business Entities and Tax Implications

Taxation of Partnerships

Partnerships are not taxed at the corporate level. Instead, taxes are levied on the individual partners based on their share of the partnership's income.

Taxation of Corporate Entities

Corporations have a separate legal personality and are subject to corporate income tax. Shareholders are also taxed on the dividends they receive.

Justification for Corporate Income Tax

• Avoid tax deferral
• Neutrality
• Incentivize investment

Tax calculation: Tax = Tax Base x Tax Rate

Corporate and Shareholder Tax Systems

Classical System

Corporate profits are taxed at the corporate level, and dividends are taxed again at the shareholder level, resulting in economic double taxation.

Full Integration System

Corporations...

Dual Income Tax System

This system levies a proportional tax rate on all net income (capital, wage, and pension income less deductions) combined with progressive tax rates on gross labor and pension income.

Implemented in Denmark, Finland, Norway, and Sweden, the dual income tax (DIT) system was introduced for reasons of economic efficiency, net-wealth tax, and a broader tax base.

Key features:

• Capital incomes are taxed at a lower rate.
• Acts as a hybrid model between income and consumption concepts (interest-adjusted income tax).
• All income and profit are divided into capital income (proportional/flat rate) and labor income (progressive rate).
• Features the lowest personal income tax (PIT) percentage on labor income.

Dividend Taxation

Corporate tax systems...

Key Economic Terminology and Definitions

Core Concepts in Macro and Microeconomics

Macroeconomics

The study of the economy as a whole.

Microeconomics

The study of individual parts of the economy.

Macroeconomics Objectives

The aims of a government relating to key economic performance indicators such as economic growth, inflation, and unemployment.

National Income

The value of income, output, or expenditure over a period of time.

GDP (Gross Domestic Product)

An internationally recognized measure of national income.

Understanding Economic Cycles and Output

Economic Growth

The increase in national income over time.

Downturn

A period in the economic cycle where GDP grows, but more slowly.

Recession

A less severe form of depression.

Depression or Slump

The bottom of

Marketing Plan

The marketing plan provides information on the marketing of the product or service.

Product Policy

Define the product or service being marketed. Consider the number and types of variants, quantity, brand, packaging, design, innovative aspects, and the phase of the product's lifecycle. These features should be compared with the products or services offered by competitors.

Communication Policy

Specify how the product or service will be announced. Describe the most appropriate means (Internet, local press, leaflets, etc.) and actions (advertising and sales promotion) through which the product will be promoted. Advertising aims to promote products or services, while sales promotion involves activities that support marketing and sales...